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What is Development?: Progress in a Vacuum

Development is the emergent property of a system. The challenge is creating the system.In his 40-min lecture posted on the Center for Global Development, Owen Barder makes a new and compelling case about how we should think about development. His talked, titled “What is Development” presents us with 2 key ideas that should shift the way we think about foreign engagement in developing economies.In Part 2 of this blog series (Part 1: Where we've been) we consider an illustrative scenario that points out the current problem with piece-meal development. Next blog, we'll look at a case study that illustrates the power of adaptive problem solving.

When we left of last we had reviewed the history of development ideas and the various parts of the economy that were proposed as the key levers for sustained development.

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Thomas Thwaites, a British design students decided that for his final project he would make an electric toaster entirely from scratch, from basic raw materials. He selected the simplest toaster model he could find for ~$6.

The simple toaster turned out to still be incredibly complicated, with over 400 parts made form hundreds of different raw materials.

Aside from trying to make a home-made smelter, Thomas faced incredible challenges. After spending 9 months and an absurd amount of money he assembled his finished product. Unfortunately, since he was unable to get any rubber, the copper wiring was not insulated and after a few brief moments of functionality, his toaster burst into flames.

The principle is that even a five-dollar toaster is an incredibly complex machine that requires an array of services and technologies. Likewise, an economy that makes toasters must provide this broad range of capabilities. If you're starting a toaster business, not only do you need functioning industry, but also a functioning legal system and labor market and transportation system.

Hence, increasing productivity or capability in one industry or aspect of the economy is itself unlikely to spur development. It is the full emergence of functioning trade, industry, legal systems and schools that leads to rapid development.

Emergence here has a specific meaning. The idea is that development isn't an activity you do, but rather the emerging feature of a system and confluence of events. If individual sectors and firms are raindrops, then development is the gathering storm. No single droplet can be described as a storm, but in composite, they form a thunderstorm.

Likewise, no particular economic activity can be rightly be described as development, but rather in aggregate they allow for the emergence of development as a property of the system.

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In the post-war 40's, the American economy was primed for development. It has a large returning labor and consumer force, a massive infrastructure and technology investment as a result of the war, and a friendly economic environment with people eager to escape the confines of the great depression. This lead to a economic boom that propelled America into a new global economic power, far more-so than before the war.

When we think of today's development landscape, it perhaps should be through the same lens of development as something that happens when the right ingredients are in place.